Usually this column is reserved for accountants doing bad things. But this week we are focusing on the worst of the worst tax preparers.
Federal court permanently bars former Liberty Tax Service owners from tax preparation business [Justice Department]
Steven Doletzky was permanently barred by a federal court in Tampa, FL, from operating a tax return preparation business and preparing federal tax returns for others.
Doletzky, a Liberty Tax Service franchisee, was also ordered on March 16 to disgorge $175,000 that he allegedly received from filing federal tax returns that claimed improper tax refunds, understated customers’ federal tax liabilities, or otherwise included false or fraudulent claims.
Doletzky was sued along with two co-defendants, Michael Garno and Michael Bass. According to the complaint, employees at Liberty Tax Service stores owned by Doletzky, Garno, and Bass prepared federal income tax returns that claimed fraudulent claims for tax credits, including for education credits and the Earned Income Tax Credit. For example, the complaint alleges that from 2013 to 2015, Liberty Tax Service stores owned by Doletzky, Garno, or Bass prepared and filed federal income tax returns that claimed more than 500 false claims for education credits.
Arizona tax preparer pleads guilty for preparing fraudulent returns and faces jail time [Arizona Attorney General’s Office]
Roberto De La O faces up to 2 1/2 years in the Arizona Department of Corrections after pleading guilty on March 12 to fraudulent schemes and artifices and two counts of preparing fraudulent tax returns.
Authorities say De La O prepared approximately 118 fraudulent tax returns for tax years 2014 through 2017. On each return, he included a W-2 or 1099-Miscellaneous form for Red Home Investments, which included Arizona and federal income tax withholding, ultimately increasing refunds for taxpayers.
During an investigation, authorities discovered that De La O was the sole member of Red Home Investments. In addition, authorities were unable to find evidence that Red Home had paid the wages reflected on the forms W-2 and 1099-Miscellaneous, and De La O admitted that he had never sent in the listed withholding.
He will be sentenced on May 15.
Anne Arundel County tax preparer Michelle Swink convicted of filing false returns for customers [CBS Baltimore]
Michelle Swink, the owner of Annapolis-based tax preparation service Noncents, was recently convicted of two counts of filing false tax returns between 2015 and 2017, and was sentenced to five years in prison, with all but a weekend suspended.
She also has to spend five years on supervised probation and won’t be able to act as a tax preparer.
Swink was also ordered to pay $72,000, the total amount of the improper state refunds, in restitution.
Tax preparer indicted for filing false returns [WAND-TV]
Jason Hines, a tax preparer in Riverton, IL, was indicted earlier this month and accused of preparing and filing false tax returns for 20 clients for tax years 2015 and 2016.
He diverted $106,033 in false federal refund claims to personal bank accounts without his clients’ knowledge, authorities say. Hines is accused of:
- Submitting false claims on clients’ tax returns to claim higher refunds.
- Showing some clients “preview” copies of their return with lower refunds.
- Reporting losses associated with the sale of business vehicles, false business income and expense amounts, and falsely claimed education credits.
Hampton, Virginia, return preparer indicted for tax fraud [Justice Department]
Carl Burden was arrested on March 11 on a federal grand jury indictment charging him with aiding and assisting in the preparation of false tax returns, theft of government funds, and failing to file tax returns.
From 2013 to 2019, Burden allegedly falsified client tax returns by fraudulently claiming dependents, residential energy credits, deductions, and child and dependent care expenses, in order to inflate the refunds sought from the IRS.
Burden also allegedly directed a portion of a fraudulently obtained refund to be directly deposited to his bank account. The indictment also alleges that during this period, Burden did not file his own tax returns.
Brooklyn tax preparer sentenced to prison for preparing fraudulent returns [Justice Department]
Emerson Gamory, who owned Emerson Gamory Income Tax Services Inc. in Brooklyn, NY, was sentenced to 15 months in prison on March 6 for preparing false returns for his clients and himself.
From 2013 through 2017, authorities say Gamory falsified client returns by fraudulently claiming deductions for gifts to charity, unreimbursed employee expenses, and education expenses in order to inflate his clients’ refunds. Gamory also prepared false returns for Gamory Tax that underreported its gross receipts and returns for himself that underreported net profits. In total, Gamory caused a tax loss of more than $550,000.
On June 25, 2019, Gamory pleaded guilty to aiding and assisting in the preparation of false tax returns and filing a false return for himself.
In addition to his prison sentence, Gamory was ordered to serve one year of supervised release and pay $574,565 in restitution.